Jamii Bora targets small ventures with 50 per cent of its lending

Money Markets

Timothy Kabiru, Jamii Bora Bank chief commercial officer. PHOTO | SALATON NJAU 

By John Gachiri

In Summary

• Small businesses will account for half of Jamii Bora Bank’s (JBB) loan book by the end of the year under the lender’s new scheme.
• To reduce the mortality rate of small businesses, the lender has set up the Jamii Bora Business Incubation Centre which will give legal, financial, business planning and governance advice to entrepreneurs.
• The bank is targeting to lend women and youth-run SME Sh4 billion by the end of the year.

Small businesses will account for half of Jamii Bora Bank’s (JBB) loan book by the end of the year under the lender’s new scheme.

JBB plans to lend the SME sector, especially enterprises run by women and youths, 50 per cent of its loans as part of its strategic focus on small businesses.

The bank is targeting to lend women and youth-run SME Sh4 billion by the end of the year, or 50 per cent of its loan book.

“Going forward, we want to maintain at least half of our growing loan-book under the enterprise segment so that, increasingly, women and youth can benefit from the bulk of our lending,” said JBB chief commercial officer Timothy Kabiru in a statement.

READ: Jamii Bora shifts focus to SME lending

The bank has introduced an unsecured loan product which allows women and youths to access up to Sh3 million without collateral.

To reduce the mortality rate of small businesses, the lender has set up the Jamii Bora Business Incubation Centre which will give legal, financial, business planning and governance advice to entrepreneurs.

JBB has joined an array of local and foreign lenders who are setting aside cash to fund Kenyan startups.

Local and international institutions set aside Sh53.1 billion for local entrepreneurs at last week’s Global Entrepreneurship Summit held in Nairobi.

The African Development Bank committed $150 million (Sh15.1 billion), the International Finance Corporation $100 million (Sh10 billion), the European Investment Bank $75 million (Sh7.5 billion) and the US-based Overseas Private Investment Corporation (OPIC) $200 million (Sh20.2 billion).

READ: Billions pledged to support start-ups, SMEs during Obama summit

Regulators say that the growing entrepreneurial environment will create a ready market for lenders but they will also have to come up with well-designed products if they are to take advantage of the new opportunity.